Honorable Travis White

President Midwestern University Wichita Falls, Texas 76308 Opinion No. R-196

Re: Validity of Senate Bill 292,Acts 60th Legislature, Regular Session, 1967, Chapter 729, page 1955
an Act relating to an OptionalRetirement Program for teachers (Article Dear Dr. White: 2922-11,V.A.C.S.)

Your request for an opinion on the above subject poses the following questions:

"1. Does the vesting provision in section 3(a) of ArticLe 2922-U.,V.A.C.S., violate section 488 of Article 3 of the Texas Constitution?

"2. Does section 8(d) of Article 2922-11,V.A.C;S., violate the first paragraph of section 48a of Article 3 of the Texas Constitution?

"3. Does the lastparagraph of section.8of Article 2922-11,V.A.C.S., violate the secondparagraph of section 48a of Article 3 of the Texas Constitution?

"4

. Does the fact that Article 2922-11,V.A.C.S., does not contain any provision providing for the coordination of benefits payable under the Optional Retirement Program with those payable under other state pension retirement funds
or direct aid from the State of Texas, violate the second paragraph of section 48a of Article 3 of the Texas Constitution?"
Section 48 of Article 3 of the Texas Constitution expressly confers on the Legislature the power to levy taxes both to support the pub11c schools, including colleges and universities, and to pay all employees of the State.

-938-Hon. Travis White, page 2, (M-196)

Section 48a of Article 3 of the.Constitutiongives the Legislature the power to tax to establish the Teachers Retirement System fund, and Section 48b of the same article establishes the 

### TeachersRetirement System and its Board of Trustees.
Article 2922-li,V.C.S., authorizes an Optional Retirement Program under which the governingboards of state colleges and universities may contractwith any life insurance or annuity company qualified to do business in Texas to provide retirement benefits for their staff and faculty. Under this statute, when a governing board establishes the optional plan, each faculty member may elect either to remain in the Teachers Retirement System or to become a participant in the Optional Retirement Program.

As we approach the question of the constitutionality, of Article 2922-15, itwould be well to observe that we'**do** not seek the answer by trying to find some specificpower in the Constitutionwhich authorizes the statute. The State Constitution, unlike the, Federal, is not a grantof power, but serves solely as a limitationof power. So the Legislature may exercise all legislativepower not denied
or prohibited to it by the Constitution. All intendments 

### are against restrictions upon the legislativepower. In order for the courts to hold an act of the.Legislature,,unconstitutional,they must be able to point out the,specific " " provisionwhich inhibits the legislation. Also, if there be two possible constructions, the one favoring the constitutionalityof a statute will be followed. A statute is not declaredunconstitutional in a doubtful case, but every intendmentand presumption favoring constitutionalityis indulged in. Byrd 

### v. Dallas,118Tex. 28, 6 S.W.Zd 738.. (1928). To the same effect 

### are: Shepherdv. San'Jacinto 

### JuniorCollege District, et al., 363 S.W.2d 742 (Tex.Sup. 1963): Perkinsv. State of Texas, 367 S.W.Zd 140 (Tex.Sup. 1963);Government Services InsuranceUnderwritersv. Jones, 368-,S.W.Zd

560 (Tex.Sup. 1963)0 As stated
case "where ..* there is a tenable theory supporting t e in th' =I?@ questioned legislative power .D. the provision

... should be upheld."
Pension systems for public employeeswere put in operation by statute long before the constitutionalamendments regarding such systems were passed. These statutory systems were upheld as constitutional in 1928by.the SupremeCourt in Byrdv. Dallas, supra, and in subsequentcases, such as, 129Tex. 101 S.W.2d

150, 1009 ? :

, of Dallas, 141 Tex 170, 170 S.W.

” 939

-Hon. Travis White, page 3, Wl96)

2d 722 (Tex. 1943). The Supreme Court reasoned that the retirementpension is part of the compensationof the employee. Thus, public 

### fundswere 

### beingput to a public purpose and there being no constitutionalprohibition, the statuteswere constitutional.

It follows that the Legislature

### had and has the constitutionalpower to create a pension system to provide retirement benefits for persons employed in public schools, colleges, and universitites supportedby the State,without relying on sections 48a and b of Article 3 of the Constitution. 'There
are many reasons why it may be desirable to establish a program through an amendment to the Constitution,but it is apparent that a feared lack of constitutionalpowerwas not the reason behind the enactment of sections 48a and b, inasmuch as that power already clearly existed. Whether the Legislature lacks the constitutionalpower to establish a second or alternate retirementprogram for persons employed in state-supported colleges and universitieswill thus depend uponwhether or not there is a prohibition 

### againstthecreation**of** 

### sucha program in sections 48a and b of Article 3, since it is clearly permissible under the remainder **of** the Constitution.

Question No. 1
Section 3(a) of Article 2922-11, requires that the Optional Retirement Program provide ‘for the vesting of benefits after one year of participation.' You inquire whether that vesting

### provisionviolates **section** 48a of Article 3 of the Texas Constitution. Section 48a provides,
::. in pertinent part, thatwith respect to the Teachers Retire-

. ment System fund authorizedby section ,i8a,"noperson shall be eligible for retirementwho has not rendered ten years

.a of creditable service in 

### suchemployment, and in no case"

shall any $personretire before either attaining the age 55~
or completing 30years of creditable service,but shallbe entitled to refund of 

### moneys paid into the fund."
Thus, out of the Teachers Retirement System fund, no benefits can be paid to anyonewho has not met the service and age requirements set out in section 48a, and any person not meeting those requirementswould have no right to any part of the fund except the right to have refunded themoneys he or she had theretoforepaid into the fund.

On the other hand, under the OptionalRetirement

### Program authorizedby Article 2922-li, the 

### facultymember's right 'to

-940-.

.

Hon. Travis White, page 4, (M-196) 0

benefits vests 

### afteronly one year of participation in the program, and if the facultymember terminateshis employment after such vesting date, the faculty

### member would be entitled to retain 

### allbenefits which had then accrued to*him.

However, the provisions of section 48a do not operhte
as a prohibition against the vesting provision of the ~~$n:~ Retirement Program.

- and only to - Section 48a specifically re-,

the Teachers Retirement System fund, and it does not purport to operate as a broader limitation on legislativepower. The Optional Retirement Program is not a part of the Teachers Retirement System,

. and the moneys contributed to the Optional Retirement

.Program never become a part of the Teachers Retirement System fund. All moneys appropriated and allocated to the Teachers Retirement System are paid to it monthly ‘basedon the estimates of the System Trustees. Those moneys become a part of the Teachers Retirement System fund when so paid. See Art. 2922-1, Sec. 11, subparagraph 2(b) and Art. 7083a.2, Sec. 3.

The Optional Retirement Program derives itsmoneys from its own appropriations and from the contributions of the participants in the program. The State's contributions are paid by the Comptroller to the disbursing officers of the several institutions, and those disbursing officers pay the total contributions of the State and the participants in the program.to the company or companies providing the benefits. See the last paragraph of Section 8 of Article 2922-U. Thus, each of the two retirement programs has its own method of financing its benefits, but they are in no way confljxting and in no way a limitation, upon 

### eachother. 

### It isthedutyof a courttoupholdthe statute if in doing so it.canbe given a reasoriable con-"~ struction that will botti render it constitutionaland carry out the legislative intent. 12 Tex.Jur.Zd 388, Constitutional L&I, Sec. 44. Accordingly,we answeryour first question in the negative.

Question No. 2
Section 8(d) of Article 2922-3.1 provides that under the Optional Retirement Program, the State shall not only contribute the amount which itwould have been required to contribute under the Teachers Retirement System, but also an additional amount equal to 6% of that portion of the facultyHon, Travis Nhlte, page 5, (M-196)

member’s saiarywhich exceeds the amountof annual salary that 1s sub]ect to computation of contributionsto the Teachers Retirement System - but only "to the extentthat such contributlon itc the Optional Retirement System)is not prohibited by other applicable laws of this statenow or hereafter in force and effect." You inquirewhether section 8(d) of Article 2922-li violates the firstparagraph of ' section 48a of Article 3 of the Texas Constitution,which paragraph, in pertinent part, provides that "the amount contributedby the State to such fund eachyear shall be equal to the aggregate amount requiredby law to be paid into the (Teachers Retirement System) fundby such employees, and shall not exceed,at any time 6% of the compensationpard each such person by the Stateand/or school districts, and shall in no one year exceedthe sum of $504 for any suchperson." Assuming iaswe do for the purposeof considering this questlonr that the above quoted section 48a limitations
on the amount of the State's contributionto the Teachers Retirement System fund apply to and governthe amount the State may contribute to the,OptionalRetirementProgram, section 8(d) of Article 2922-U stilldoesnot violate section 48a,because the State's contributionmade under section 8(dt is authorized only "to the extent that such contrlbutzon 1s not prohibited by otherapplicable laws of this Starenow or hereafter in forceand effect." Therefore, if the above quoted section 48a limitations
are applicable to the State's contributionmade under Section 8(d), then by the express termsof section 8(d) those section 48a limitations will control,and there
can thereforebe no violation of section48a. Where such a statute can be given a more restrictedinterpretation ', to apply only to matters lying within the legislative power, a court will do so and uphold itsvalidity to I harmonizewith the Constitution. 12Tex.Jur.2d390, ConstitutionalLaw, Sec. 45. Accordingly,we answer your secondquestion in the negative.

Question No, 3

In view of the issue raised in your fourth question, we assume that your third question involvesthe following portion of section 8 of Article 2922-li, towit: "The contributions of facultymembers participating in theOptionalRetirement.

Hon. Travis White, page 6, (M-196)

Program in each institutionof higher education shall be deducted as provided by law applicable to the System. The contribution of the State for facultymembers participating in the Optional Retirement Program in each institution of higher education shall be paid by the Comptroller of Public Accounts of the State of Texas to the applicable institution of higher education. The disbursing officer of such institution of higher education shallpay the total of such contributions from both the facultymember and the State to the company providing the Optional Retirement Program for that institution." You inquirewhether the above quoted p~rovision violates the followingportion of section 48a of Article 3 of the Texas Constitution,to wit: "The Legislaturemay authorize all moneys coming into such fund to be invested in, bonds or other evidences of indebtednessof the United States, or of this State, or any county, city, schooldistrict, or other municipal corporationor district of this State, or in such other securities as are now or hereafter may be permitted by law as investments for the PermanentUniversity Fund of this State: provided a sufficient sum shall be kept on hand to meet payments as’they become due each year under such retirement plan, as may be providedby law:

....'

As we have pointed out heretofore in this opinion, section 48a authorizes the establishmentof the Teachers Retirement System fund and prescribes certain conditions ; governing the operation of that fund. Indeed, in the provision here under consideration section 48a states that "The Legislaturemay authorize allmoneys coming into the fund to be invested

....I Thus, it is perfectly clear Hiat theconstitutional orovision in auestion deals onlv with "moneys coming into-the (Teacher;Retirement Syst&) fund.' Rut the questioned provision in the last paragraph of section 8 of Article 2922-11does not deal with "moneys coming into the (TeachersRetirement System) fund.' On the

it deals exclusively with moneys that never go contrary, into the Teachers Retirement System fund. As stated before, the moneys dealt with under the provisions of Article 2922-li remain in the hands of the Comptroller of Public Accounts and the disbursing officers of the several institutions of higher educationuntil they are paid to the r~ company or companiesproviding the Optional Retirement ~Program. Therefore, there is no conflict between.the above quoted provision of Article 2922-11 and the above quoted provision of section 48a of Article 3 of the Texas Constitution because they relate to differentmoneys, and, again, there is no attempt in section 48a to prohibit or limit anything other than the activities of the Teachers Retirement System.Hon. Travis White, page 7, (M-196)

.

In accordancewith the canons of construction heretofore discussed, we answeryour third question in the negative.

QuestionNo. 4
,Section7 of Article 2922-U provides as follows:

"A facultymemberwith ten (10)or more years of creditable serviceunder the Retirement Systemwho has elected toparticipate in the Optional Retirement Program in accordancewith the provisions of Section 5 andwho has not further elected to withdraw his contributionas provided in Section 6 shall become a limitedmember of the Retirement System for the purpose ofaccruing Service Retirement Benefits as hereafter providedbut shall no longerbe considered
as a member of the Retirement System for the purpose of accruing Disability,Death and Survivor Benefits ,thereunderandno such disability, death and survivor benefits shalibe payable by reason of limitedmembership except ashereafter provided. If a limitedmember shall die before retirement and during any schoolyear in which themember is in service, there shallbe paid .tohis designatedbeneficiary the accumulatedcontributions standingto the account of the member in the Teacher SavingsFund; however, no other death or survivor benefit or option shall be payable by reason thereof. The faculty member on limitedmembership shall be required tomake no further contributionsto the RetirementSystem. A limited member shallbe entitled to ServiceRetirement Benefits under the, Re-, tirement System:provided,however, that for thepurpose of computing the StandardAnnuity under the *' methods providedby law and thus the amount of such 7, benefits only the facultymember's creditable service and compensationprior to making an-election to participate in the OptionalRetirement Program shall. be considered."

YOU inquirewhether the above quoted section 7violates the second paragraph of section 48a of Article 3 of the Texas Constitution whichprovides, in pertinent part, that "the recipients of (theTeachersRetirement System) fund shallnot be eligible for any other State pension retirement fundsor direct aid from the State of Texas,unless such other Statepension

### Hon..Travia White, page 8 (M-196)

or retirement fund, contributed by the State, 

### le released to the State of Texas aa 

### a condition to recelvlng such other 

### pexision

aid

....‘I
Since Article 2922-11 does not provide or contemplate that a recipient of the Teachers Retirement System fund who elects to pdrtlcipate in the Optional Retirement Program will release to the State the moneys.contMbuted by the, State to the OptIonal Retirement Program to hle credit, It follows that 80 long as a faculty memberis a recipient of the Teachers Retirement System fund, he Is not eleglble to receive any benefits from the Optional Retirement Program. Hemayeasily cease to be a recipient of the Teachers Retirement System fund by withdrawing from the Teachers Retirement System and withdrawing from the fund all contributions he has made.thereto. See section 48a of Article 3 of the TexarrConbtitutlon; Section 6 of A+cle 2922-U. Of cpuree, upon the withdrawal of such conttlbutions from the fund; the faculty memberwill thereby forfeit and relinquish all accrued rights a8 a member of).th& :. Teacher8 Retlrcment System.

Since section 7 of Article 2922-11 attempts to permit recipients of the Teachers Retirement System fund to be eligible for another State pension retirement fund without

“such other State pensiop retirement fund, contributed by the State to the credit of the recipient, being released to the State of Texas,” said se’ction 7 violates the above quoted provisions ~ofsection 48a of Article 3 of the Texas Constitution and is therefore, unconstitutional and void because 

### neceshlarily

antagoqletic to the clear constitutional 

### provision. 12 Tex. JLWB.2d 3’74, Constitutional Law, Sec. 30. However, since the act out of which Article 2922-11 arose contained a savings or severabllity clause and since all:of the other provisions .of the’ act can be given effect without giving effect to section 7 thereof, the remainder of Article 2922-U iB not Invalidated by the unconstltutlonallty of section 7. 12 Tex.Jur.2d 394, Constitutional Law, Sec. 49, and ca6es there cited. Accordingly, we answer your fourth question that section 7 of Article 2922-11 is Invalid because it violatee section 48a o? Section 3 of the TeXaB Constitution.
Whathas been,said heretofore in this opinion disposes bf the four specific questions posed by you, but it ehould bea noted that in enacting Article 2922-11, the Legislature adopted the following statement of purpose and intent:

-945-, .

Hon. 

### TravisWhite, page 9, (M-196)

"The Legislature finds that higher education is vitally rmportant to thewelfare, if not the survrval, of Texas and the United States at this stage in history and that the quality of higher education is dependent upon the quality of college and university faculties. The Legislature finds, therefore, that moneys spent 

### on recognized meansfor 

### producing
an excellent system of public higher education is money spent to serve a public purpose of great importance. The Legislature finds further that a sound faculty retirementprogram that provides full and complete retrrement benefits to teachers and administrators who have given faithful service to state-supported institutions of higher education is a well-recognized:
means for improvins a state's nrocram 

### of DubliC hiaher education. The Legislature'spurpose in establishing the retirement program provided forby this Act is to improve further the higher education available to the vouth at the state-suonortedcolleoes and universities and to establish this-Retirementp- rogram as part of the plan of compensation for the faculty of these colleges and universities." (Emphasisadded.)


### Section49b of Section 3 of the Texas Constitution, like section 48a discussed above,dealswith "moneys coming into the (TeachersRetirement System)Fund," and has no application. to moneys in, or contributions to, the Optional Retirement' Program,which latter moneys and contributions 

### nevergo into and.neverbecome a part of the Teachers Retirement System fund.

We conclude, therefore, that neither section 40a nor 49b of 

### Section3 of the Texas Constitution contains any prohibition against the establishmentof a second or alternates retirementprogram for persons employed in state-supported colleges and universities, and that with the exception of section 7 noted above, the Legislaturewas fully empowered to create the Optional RetirementProgram authorized in Article 2922-11.

SUMMARY

1. The vesting provision of section 3(a) of Article 2922tli,V.C.S., does not violate section 48a of 

### Article3 of the Texas Constitution.

. 2. Section 8(d) of Article 2922-li,V.C.S., does not violate the first paragraph of section 40a of Article 3 of the Texas Constitution.

-946-Hon. Travis White, page 10, (M-196)

3. The lastparagraph of'section.8of Article 2922-li, V.C.S., does not violate the secondparagraph of.section 48a of Article 3 of the Texas Constitution.

4. Section I of Article 2922-li',V.C.S.~; violates section48a of Section 3 of the Texas Constitution and is therefore invalid. However, it is severable! 'andthe remainder of the Article is not rendered invalid by the unconstitutionalityof section 7.

5. With the exception of section7 of Article'i2922-li, V.C.S..,the,Legislaturewas empowered to.create the,Dptional Retirement,Programauthoriz,ed by Article 2922:li.

Preparedby Houghton Brownlee,Jr. AssistantAttorney General

APPROVED:. OPINION COMMITTEE

Hawthorn Phillips,'Chairman Kerns B. Taylor, Co-Chairman

W. V. Geppert Ralph Rash Milton Richardson Jack Sparks Robert Flowers .HaroldKennedy
ExecutiveAssistant A. J. CARUBBI, JR.

-947-